Friday, May 4, 2018

Target to expand Drive Up service to nearly 270 stores

In 2017 Target began pilot projects of a new service called Drive Up. The service allows customers to place their orders through a Target app. They then pick up their orders at a Target store and have it delivered to their car.

Target is now expanding Drive Up to nearly 270 stores throughout the south and southeast of the United States. Already a number of stores in Texas and Florida provide the service, as do some stores in Alabama, Georgia, Louisiana, Mississippi, Oklahoma and South Carolina.

How Drive Up works

Using the Target app, the customer selects Drive Up as the fulfillment option when ordering. The customer is notified when the order is ready to be picked up. While Target suggests up to two hours as a time frame, many orders often take much less time. In early tests, Target was having orders ready as quickly as 21 minutes, according to an analyst report from Gene Munster of Loup Ventures.

When you are going to the store you tap an "I'm on my way" button on the app. If you wish you can share your location so the team at the store know when you will arrive but it is not necessary. Once your order is completed of course your location is no longer shared.

There are designated Drive Up spots where you park. Your order should come out within two minutes.The wait time, during early tests, averaged an impressive 1 minute, 18 seconds.

When the order comes a barcode on your app is scanned to verify your identity. The customer finger signs on the employee’s device to pay for the order. The transaction is completed with a “thank you” confirmation screen displayed on the customer’s Target app.

Target has specific dedicated and trained staff to handle the Drive Up orders.

Rivals already have similar programs and more

Target needs to roll out more Drive Up services to compete with competitors such as Walmart and Amazon. Target is also introducing same-day delivery to five major US cities. The Drive Up service should be available in up to 1,000 stores by the end of 2018. Target has 1,800 stores in all. Target has headquarters in Minneapolis Minnesota. In 2016 it had 341,000 employees. Target expanded to Canada but was not successful and closed all its stores.

Techcrunch notes about Amazon and Walmart:Both today offer curbside pickup of groceries – the former via its online Walmart Grocery shopping service, and the latter through AmazonFresh and Whole Foods. Target, meanwhile, acquired grocery delivery service Shipt for over half a billion last year. The service has yet to roll out a grocery pickup option. (That’s something in discussion, but the near-term focus is on expanding Shipt to the majority of Target’s U.S. stores by the end of the year.) In addition, both Amazon and Walmart offer in-store pickups and self-serve pickup experiences with Amazon Lockers and Walmart’s Pickup Towers, where available.

Effect of Drive Up on in store sales

While one might think that there would be less in store sales as Drive Up expands, Dawn Block of Target believes that the Drive Up orders will end up adding to the bottom line. However, she admits it is too early to tell for sure.

Block explains: “We find this is a slightly different trip type. It’s really more of a fill-in and a quick trip. And when the guests have time and want to head into the store, we find that they’re doing that and they’ll continue to do that….We believe that it absolutely is [additive]."

During pilot tests although some stores managed with existing teams, others had to have staff work overtime or hired extra staff to deal with the service. Block said: “We will watch the staffing levels really closely and make sure that we’re continuing to deliver on the guest expectations. The guests love that speed and convenience. So we’re going to staff appropriately to keep that up.”